One of the fastest growing economies in the European Union with a Gross Domestic Product (GDP) having grown by 5.5% in 2019, Ireland has flourished in recent years, surpassing other member states. This coupled with the upbeat prospects given to the country by leading rating agencies which anticipate that it will manage to weather any tensions caused by Brexit, trade related concerns, geopolitics and even the COVID-19 pandemic means that the Celtic Tiger has a positive forecast set for its future.
These favourable conditions certainly call for investing in Irish companies and their stock. And whereas Google, Facebook and Apple all have headquarters in the country, there are Irish companies that have spread their wings, making waves both home and abroad. Featuring consistent performance and remarkable growth, here we explore some of the top Irish stocks you may want to consider.
A manufacturer and distributor of building materials headquartered in Dublin, CRH was formed through a merger of Cement Ltd and Roadstone Ltd in 1970 and is a leading manufacturer and supplier of a diverse range of superior building materials and products used in the construction and maintenance of infrastructure, housing and commercial projects. A major supplier to the construction industry in the US, the company also has a strong positioning both in Europe and in Asia.
Employing 79,200 individuals at 3,100 locations worldwide, CRH is ranked as the largest Irish company, having steadily grown into an industrial powerhouse since its inception. Long pursuing an active acquisition programme spending as much as €1 billion in a single year, CRH typically targets small and mid-sized businesses to grow its international network of companies.
CRH went public in 1973 partly in order to boost the group’s expansion objectives, while it has secondary listings on the Irish Stock Exchange and the New York Stock Exchange. A Fortune 500 company, it forms part of the FTSE 100 index, the EURO STOXX 50 index, the ISEQ 20 and the Dow Jones Sustainability Index (DJSI) Europe, while its revenue for 2019 amounted to €25 million and its sales revenue as of August 2020 has reached $12.2 billion. With earnings over the next few years expected to increase and the possibility for more robust cash flows, CRH’s stock could offer great potential for growth.
Johnson Controls International plc
The merger of American company Johnson Controls and Irish Tyco International, Johnson Controls International plc is a multinational conglomerate headquartered in Cork, focused on developing energy solutions, integrated infrastructure and transportation system. Its technology and service capabilities include fire, security, HVAC, power solutions and energy storage, serving various end markets including large institutions, commercial buildings, retail, industrial, small business and residential.
Performing one of the largest tax inversions in history, the company has added more than $10 billion to its total revenue since 2016, while as of 2017, it was listed in the Fortune Global 500 and the Fortune 500. As of 2019 it employs 105,000 people in around 2000 locations across six continents, whereas revenues in 2018 grew 4% year-on-year, placing it on the list of the most profitable enterprises this year despite the COVID-19 pandemic. Indeed, its stock is up by a considerable 15% over the past three months and with forecasts indicating that the company will continue to see an expansion in its earnings, Johnson Control International is a company worth keeping tabs on.
Kerry Group plc
With a portfolio of popular household brands ranging from Denny, Cheestrings, Fridge Raiders and others, the Kerry Group plc is a provider of taste and nutrition solutions, serving the food, beverage and pharmaceutical industries. Despite its humble beginnings as an Irish dairy cooperative, the company has become the largest player in the ingredients and flavours market, with much of its journey so far marked by dynamic growth and strategic acquisition. With 150 deals struck to buy companies around the globe, the company is one of the largest businesses in Ireland.
Most notably, the company has delivered positive earnings growth in each of the last five years, while it has a relatively resilient business model as its ingredient business has increased at a consistent rate even during recession years. On the other hand, its core business centred on integrated and flavour solutions which accounts for 88% of its profits and 81% of its sales, has served as the company’s main growth engine. Revenue in 2019 was at €7.2 billion, while its market cap as of January 2020 is $21.36 billion.
The company went public on the Dublin Stock Exchange in 1986, while on April1990, the Kerry Group was also listed on the London Stock Exchange. As of May 2020, the company employs over 26,000 people in its manufacturing, sales and technical centres worldwide, counting 1,000 R&D scientists and with $8.1 billion sales in 2020 so far.
With its strong financial position, scalable business model and excellent track record of successfully integrating new companies, the Kerry Group can provide a good mix of solid growth prospects and a resilient outlook.
Kingspan Group plc
Another Irish heavyweight in the building materials business, Kingspan is a global leader in high-performance insulation and building envelope solutions. Established at the back of brothers Eugene and Brendan Murtagh family’s pub in 1965 in Kingscourt, Country Cavan as an engineering and contracting business, the company grew and expanded into the insulated panels and rigid insulation board segment through the acquisition of companies, eventually branching out in Europe, South America, Singapore and Australasia.
Operating in 5 business divisions, Kingspan Group’s insulated panels segment manufactures panels, structural framing and metal facades, whereas the insulation boards segment produces rigid insulation boards, building services insulation, as well as engineered timber systems. On other hand, the light and air segment is engaged in manufacturing daylighting, smoke management and ventilation systems, while the water and energy sector produces energy and water solutions. Lastly, the data and flooring segment manufactures data centre storage solutions and raised access floors.
The group floated on the Irish Stock Exchange (ISE) in 1989 with a value of IR£20 million. Up until 2019, the stock has zoomed 172% in the previous five years, while the total dividend has also gone up which means that long-term shareholders would have managed to gain handsomely. Today Kingspan is a €4.4 billion revenue group with 150 manufacturing facilities employing over 15,000 individuals globally, while it trades in over 70 countries. In 2019, it launched its ambitious 10-year Planet Passionate sustainability programme which will see it tackle important global issues such as climate change, circularity and protection of our natural world.
Bank of Ireland Group plc
One of the so-called traditional ‘Big Four’ Irish banks and historically the premier banking organisation in the country with a unique position in the Irish banking history, the Bank of Ireland is a commercial bank and one of the oldest ones in operation. Established by Royal Charter in 1783, it originally opened its doors to the public in a private house. A Forbes Global 2000 company, today the Bank of Ireland serves customers through its network of 264 branches and 1550 self-service devices, while it provides several banking and financial products and services in Ireland, the UK, as well as internationally. It operates through its Retail Ireland, Wealth and Insurance, Retail UK, as well as Corporate and Treasury segments.
In 2008, at the height of the financial crisis, Moody’s Investors Service changed the bank’s rating from stable to negative, after identifying its weakening asset quality and the impact the economic environment at the time would have on its profitability. In effect, in March of 2009, shares reached €0.12 during the day, reducing the company’s value by over 99% from its 2007 high. Since then, the bank has managed to turn things around, despite the current impact brought about by the COVID-19 pandemic. Ireland’s largest bank by assets saw a substantial price movement on the ISE which gave investors a better opportunity to enter into the stock and potentially buy at a lower price. At the same time, in August 2020, its shares rose by 10%, showing some signs of recovery despite first-half pre-tax losses, spelling a potential positive outlook on the horizon.
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The contents of this article are not intended to be taken as a personal recommendation to invest but strictly based on research and for information purposes only. Retail investors should contact their financial adviser for a suitability assessment prior to taking any investment decisions.